Undertaken in the country’s top cities of Mumbai, Bengaluru, Pune, Hyderabad, and NCR, 55% respondents in the age group of 18 and 35 years are willing to rent co-living spaces.
Over 70% of millennials, aged between 18 and 23 years, have given co-living spaces a thumbs-up as youngsters moving to new cities and are looking for easy access and reasonably priced rental accommodation, according to a survey by Knight Frank India.
Undertaken in the country’s top cities of Mumbai, Bengaluru, Pune, Hyderabad, and NCR, 55% respondents in the age group of 18 and 35 years are willing to rent co-living spaces.
“Co-living aims to create a community-centered living environment that not only provides privacy in living arrangements but also promotes social contact through community spaces and programs. As an asset class, the biggest driving force behind the rising popularity of co-living spaces are young renters moving to new cities who are looking for easy access and reasonably priced rental accommodation,” Shishir Baijal, chairman & MD, Knight Frank India said in a statement.
Though the concept is novel, Baijal observed: “It’s here to stay, as Indian millennials currently account for 34% of the total population which is expected to increase to 42% by 2025. We feel that with the recent acceleration of growth in the migrant population to key cities, organised players rental housing will be able to bridge the housing gap.”
Co-living inventory presents a lucrative rental income opportunity for developers/owner operators. The study says that a stable co-living facility generates a net yield of approximately 12%, while rental yields from a traditional 1BHK remain at 1.5 – 3%. Co-living further enhances revenue potential as the cost of shared spaces such as kitchen and living rooms is amortised over a greater number of bedrooms than in a traditional residential development.
“The survey conducted by Knight Frank India shows great potential for rental housing in the country. As more and more organised players enter co-living spaces, these are likely to attract institutional funding, assuring better yields to the development and operating companies. This will, therefore, allow funds over time to further diversify their rental yield-generating asset portfolios in India beyond office space and retail malls,” Baijal added.
The survey also observes that close to 40% of all respondents are most comfortable in paying between Rs 120,000 to 180,000 per annum towards rental housing in key cities of India. The sweet spot for rentals thus remains at a monthly outflow of Rs 10,000 to 15,000.
Other Key findings:
- 37% of private working professionals and 45% of student respondents surveyed were willing to spend between Rs 10,000-15,000 on monthly rentals
- Of the total millennials surveyed, 56% were willing to consider co-living spaces for their accommodation requirements
- In the 18-23 years age bracket, 72% were willing to consider co-living spaces as an option for accommodation while in the age bracket of 24-29 years, 56% respondents were inclined to consider this option
| 18-23 years | 24-29 years | 30-35 years | |||
| % of respondents willing to spend Rs 10,000 – 15,000 pm | 54% willing to spend Rs 10,000-15,000 per month on their accommodation | 46% willing to spend Rs 10,000-15,000 per month on their accommodation | 39% willing to spend Rs 10,000-15,000 per month on their accommodation | ||
| Most common annual income group | 53% of the respondents in this age group earn an annual income of less than Rs 3 lakhs | 45% of the respondents in this age group earn an annual income of more than Rs 8 lakhs | 56% of the respondents earn an annual income of more than Rs 8 lakhs | ||
| % respondents willing to consider co-living spaces | 72% of the respondents in this age group are willing to consider co-living spaces as an option for their accommodation | 56% of the respondents are willing to consider co-living spaces as an option for their accommodation | 29% of the respondents are willing to consider co-living spaces as an option for their accommodation | ||
